According to the CIPD appears to be no common understanding of employee engagement. Some definitions focus on employee behaviour or employee attitudes, some on employee feelings, some on conditions of work, and what the organisation does for them.
Many authors say various combinations of all these things, yet others define engagement as a situation in which one of these things causes another - such as attitudes cause behaviour. In academic literature, it is seen as a psychological state experienced by employees and should be seen as different from job quality, employee behaviour, or management action. So, there is a wide range of opinions on what constitutes engagement.
According to Gallup, engaged employees are "those involved in, are enthusiastic about, and committed to their work and workplace".
According to Willis Towers Watson, employee engagement is all about "employees' willingness and ability to contribute to company success".
Aon Hewitt defines employee engagement as "the level of an employee's psychological investment in their organisation."
Clearly, there are challenges with variation in definitions and measures but one thing is for sure - that Employee engagement is a firmly established topic found amongst a whole host of disciplines. It is referenced in decisions by investors, boards, and managers alike.
Fundamentally, it is the belief that if employees have good quality jobs, are motivated, well managed, rewarded, valued, and believe in the company, they will be happier, healthier, and more likely to perform better. Thus, increasing their productivity, delivering better services, and increasing their levels of innovation. This mutual gains view of motivation and people management lies at the heart of employee engagement.
At a basic level, according to the Pyramid of Employee Needs published by Harvard Business Review, employees need the following to feel engaged:-
- to feel part of a great team
- the autonomy to do their jobs
- opportunities to learn and grow
- to be able to make a difference and feel like they have a direct impact on the business
Some of this might catch leaders by surprise. Many assume that employees’ only real drive is money - but according to a survey conducted by the Job site Indeed, they found employees would sacrifice almost £2,000 from their salary for greater levels of flexibility/happiness at work and a good work-life balance.
Looking at Maslow’s Hierarchy of Needs and applying it to Employee Engagement, the priority is employees must have their basic needs: salary, and working conditions met. This is before reaching high-level needs such as feeling part of something bigger within an organisation.
The reality is there is no one element that can influence engagement; it is a collection of strategies that work together to build a compelling proposition for the employee.
So why should engagement matter to organisations?
Well, employee engagement has a real impact on business success, it is reported low levels of employee engagement result in increased employee turnover, higher absence, and key talent leaving the company, which in turn means an increased need to recruit, onboard, and train new employees, all of which come at a cost.
- According to Gallup’s State of the Global Workplace, low Employee Engagement costs companies $450-500 Billion each year.
- At a granular level, a disengaged employee costs a company somewhere between $3,500 to $10,000 annually.
- Research shows that sickness took due to mental health costs the UK economy over £8 billion per year, so under-investing in employee wellbeing carries significant risks for both businesses and employees.
- Burned-out employees are 63% more likely to take a sick day. (Gallup)
- While 50% of employees agree that managers who help with career development drive up their level of engagement, only 29% of employees are actually happy with their Career Advancement Opportunities.
- Gallup estimates front-line managers account for at least 70% of the variance in employee engagement scores.
But turning our thoughts toward a more positive outlook, what could a good engagement strategy do for organisations? Well, here is some food for thought:
- Companies that value their employees and treat them as their greatest asset, create sustainable competitive advantage and long-term strength, outperform those who don’t by more than 200% (The Dale Carnegie Training Course for driving employee engagement)
- Companies with a highly engaged workforce are 21% more profitable.
- Those with highly engaged teams sell 20% more than teams with low engagement Companies that effectively turn feedback into action have an 80% employee engagement rate.
- Mindful and happy employees are 12% more productive.
- 37% of employees consider recognition the most important - A recent report by Bonusly ‘Employee Engagement & Modern Workplace Report’ shows that 84% of highly engaged employees were recognized the last time they went above and beyond at work compared to only 25% of actively disengaged employees.
- And finally, Company Culture - While workplace culture and employee engagement are two separate entities, they are interrelated. When organizations strategically incorporate the two into their mission, culture and engagement thrive. In a 1992 research project, James Heskett and John Kotter looked at the corporate cultures of 200 companies and the long-term effect on economic performance.
- One standout exhibit in their study highlighted the difference over an eleven-year period between twelve companies with a strong and engaging culture and twenty companies that did not. The results are pretty staggering, they found those with strong cultures grew their net income by 756%, compared to 1% for the companies lacking in culture. These companies also grew their revenue by 682% and their stock price by 901%.
So, clearly, culture has a significant impact on engagement levels and the statistics tell us that any investment you make into boosting employee engagement is likely to see positive returns.
At Innecto, we can work with you to help identify your current employee engagement strategy and enable the development of tailored approaches that will make the most impact. Our levels of service can be tailored to your current strategy and challenges. To find out more, email me (emer.bucukoglu@innecto.com) or call our consultancy team on +44 (0)20 3457 0894.
